12 March 2019
Senior managers appointed by Population Services International (PSI), the Principal Recipient for the Global Fund’s malaria grant in the Democratic Republic of the Congo (DRC), manipulated the local tenders relating to PSI’s bed net mass distribution campaigns. These manipulations, which also extended to transportation contracts managed by local fiduciary agents hired by PSI, resulted in systemic and significant overpricing of transportation, warehousing, and customs clearances contracts, and an estimated financial loss of US$7,386,066 to the Global Fund.
Following the investigation, PSI has acknowledged this loss and has refunded the Global Fund in full. PSI’s inadequate internal governance and weak oversight of its DRC operations facilitated the wrongdoing. The Global Fund’s reliance on, and non-evaluation of, PSI’s internal controls reduced its ability to identify these procurement irregularities proactively. The Global Fund is reevaluating the assurance framework agreed with PSI to provide further clarity on the division of responsibilities between different assurance providers and to periodically evaluate the effectiveness of PSI’s internal controls.